If labour productivity grows at 1.5% and total factor productivity grows at 2%,capital should grow at

Question

Quizplus · Accepted Answer

The growth rate of capital can be derived using the formula for total output growth, which is the sum of labor productivity growth and total factor productivity growth. If labor productivity grows at 1.5% and total factor productivity grows at 2%, the capital growth rate needed to achieve this is 0.5% to balance the equation.

If Labour Productivity Grows at 1